Using Credit Wisely

How to use credit

You may be wondering, What is the difference between a debit and credit card? Well, We've got the answer. A debit card is a card that withdraws money directly from your bank account. When you don't have any money you can buy anything. A credit card is a card that uses credit and your trustworthiness that you will pay off your expense at the end of the month. The way to get positive credit is by setting up a budget and sticking with it. Don't over spend and not pay your debts. Secondly, Have a mixture of credit types. Such as a house loan and a car loan. Don't only buy clothes with your card. Lastly, Apply for only the credit you need. Dont over apply.

APR and Important Facts

What is APR? It is your Annual Percentage Rate. It is very important to know how much Interest you will have to pay if you're a day late. Lots of companies will lure you in with their 0% APR rates for a year. They do this because they know you won't be able to pay your debt off for a while. That is the disadvantage to a credit card. The Advantage is that it gives you extra time to pay things off. Maybe a little more time is all you need, but for some people it is their downfall. An advantage for a debit card is that if you don't have the money it won't let you buy the item. So it can help keep you out of debt. A disadvantage is that all of your money will come straight out of your account and if you want a loan you may not get it because your credit score isn't high enough. A couple more advantages of using credit is that you will boost up your credit score and it can be a relief line in emergencies. You will have a better chance at getting loans ect and keep yourself ready in an emergency. Two more disadvantages are High interest rates and blowing your budget. You may spend all of your money plus more and go into debt that you can't get out of. You can get a free credit report once every year. If you find something wrong with your report, tell you card company immediately. If you are looking to borrow money and are experiencing financial difficulties you should get a financial planner to help you out. Contact any financial planner you see fit.